Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Thursday, June 01, 2023

Interview with José Juan Haro, Head of Public Affairs at Telefónica Hispam

"This year we will announce new alliances in Latin America"

José Juan Haro, responsible for Public Affairs and Wholesale Business at Telefónica Hispam, provided details about the initiatives that the operator is currently carrying out in terms of partnerships and digital inclusion. He said that in Chile and Colombia, approximately 100,000 households are being connected with fiber optics each month.

<strong>Convergencialatina: What initiatives can you highlight in the field of partnerships and digital inclusion in recent months since this year's MWC?

José Juan Haro (JJH): We have been very active in the field of partnerships in Latin America. Some time ago, we launched our neutral fiber operators in Chile and Colombia. The deployments we have achieved are very impressive: we are currently deploying around 100,000 households per month in each territory. Partnerships are formed on a day-to-day basis, and we need to show the impact of what we are generating. In Mexico, we are providing 5G services thanks to our partnership with AT&T.

Of course, we are continuously exploring new partnerships. This year, sooner rather than later, we will announce new partnerships in other territories. We work in all eight countries of our region with a strong focus on further developing this vision. Among the most recent developments, we have the agreement we announced and are in the process of executing with Iplan for the northern region of Gran Buenos Aires.

Convergencialatina: The reason why you reached agreements with KKR to form neutral infrastructure companies in Chile and Colombia is not the same as the reason why you agreed with AT&T in Mexico, which is more focused on reducing spectrum costs.

JJH: The underlying philosophy is the same. We are convinced that networks can deliver lower average costs and be more efficient when shared. It is true that the starting situations are different. In the case of Mexico, which is not unique to that country, spectrum is excessively expensive, making it impossible for us to make it profitable for the size of the operator we had. So we made a complex decision to shut down our network and move to AT&T's network. In practice, this means that AT&T's network is a shared network that serves both AT&T and Telefónica customers.

In the case of fiber, the rationale is different: if we are able to form a neutral operator, we will allow the infrastructure that we initially developed to be used not only by Movistar but also by others. The unit cost per connection is reduced.

This allows us to attract capital and accelerate new deployments.

Convergencialatina: Mexico is not the only country in Latin America with high spectrum costs. Are you considering making the same decision in other countries in the region?

JJH: Our strategy has two different fronts. The first one is related to the regulatory aspect, aiming to demonstrate that, on average, spectrum in Latin America costs three times more in relation to revenue compared to Europe. This is a concerning fact. That's why we propose a profound review of the regulatory framework to achieve the sustainability of networks and universal coverage. The second front focuses on the business aspect. If we are able to imagine new operating models, such as network sharing, infrastructure sharing, and spectrum sharing, it would allow us to be more efficient and serve our customers in a sustainable and long-term manner.

Convergencialatina: How does the emergence of a company like Sites, owned by América Móvil, impact your business planning?

JJH: Sites is not the only case of neutral infrastructure operators. There are several players in the industry, and these types of experiences are all based on the same idea. Sharing is more efficient and reduces costs for all players. We are convinced that the opportunity lies not only in passive infrastructure but also in active infrastructure, including access networks and transport. Everything is shareable if the operation is structured appropriately.

Convergencialatina: Are there any developments regarding the possibility of replicating "Internet Para Todos" from Peru in other countries?

JJH: Yes, it's a very interesting experience that will soon celebrate its fourth anniversary. It is a sustainable company that has connected over three million Peruvians to 4G technology, covering 15,000 rural locations. We are pleased with the results, and this allows us to aspire to expand the experience at a regional level. We are making progress with the same scheme in other territories in Latin America, and we hope to make announcements soon.

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